Engineering for the Developing World: Meeting Market DemandRobert Springer | November 24, 2015
Successful companies react quickly to changing customer preferences. Global Cycle Solutions, a company with a mission to improve living conditions among poor Tanzanians, is not exempt from this mandate. The company found that it needed to rapidly pivot to distributing ready made products when its bicycle-powered multi-crop thresher didn’t sell well enough.
The first article of this series looked at GCS’ efforts to design, manufacture and distribute the thresher in Tanzania. This article considers how the company transformed from a research and development outfit to one that specializes in distribution.
From R&D to Distribution
The journey from R&D and manufacturing to sales and distribution was a tortuous one for GCS. Jodie Wu, who holds a degree in mechanical engineering, felt that the bicycle-powered thresher needed to be designed and manufactured close to its users yet “the best kind of manufacturing is manufacturing at scale,” she says.
Manufacturing at scale proved impractical in Tanzania due to electric power rationing. Wu says that power-related delays caused production of the first 300 threshers to take six months instead of the projected three. “Every other day we had no power and a generator isn’t sufficient for welding. You need a very powerful generator to do welding and we didn’t have one,” she says.
The task of distributing the threshers GCS managed to manufacture proved to be daunting. Wu’s initial thought was to ask bicycle salespeople to sell them, yet the sellers were only interested in selling bikes. Her next idea was to target businesses in the agricultural sector as they continuously introduced new products, seeds and farming practices to farmers. But Wu concluded that this tactic wouldn’t succeed as villagers needed to see the thresher operate to appreciate its capabilities.
Her answer was to create a direct and indirect sales force to show villagers how the thresher worked and could improve their lives. “If we are going to distribute new technology, it has to be in a form and a format where people can experience it,” Wu says. “It’s really about the customer experience.”
Wu noticed something when she demonstrated the pedal-powered thresher for villagers: they were more interested in her solar-powered light, something that was made in China, not Tanzania, and had little to do with helping them thresh grain more efficiently.
In rural areas which are up to 97% without electricity, villagers spend 20-40% of their income on illumination, mainly for candles and kerosene for lanterns. A rechargeable light that could slash their energy bill proved tantalizing. She was surprised that a villager offered to buy her light for $50, a large sum for a rural Tanzanian.
Wu realized that instead of trying to come up with the next hot technology, she should expose rural Tanzanians to products that already existed. Her challenge became one of product selection and distribution, not creation. “It was the realization that there was a lack of awareness of the different products at their disposal,” Wu says.
Ending work on the thresher was a difficult yet necessary move for Wu and GCS. Although it was tough not having the “hot technology” available any longer, GCS sales agents could now demonstrate products that they didn’t need to manufacture and that were easily obtained.
The first batch of 100 lights that she imported sold out within a month. GCS currently sells close to 2,000 lights a month. “I’ve moved to container levels [of products], but what’s driven my passion for loving distribution is that because I’m an engineer, my suppliers listen to me,” she says. “They don’t do everything that I want them to, but we have that discussion.”
At 150 lumens, the three-watt solar lights are 15 times brighter than kerosene, are weather resistant and also non-polluting. “It’s powerful, especially when you’re used to living in the dark and you’re in an area where there is no light anywhere else,” Wu says. “You can see it from a kilometer away.” The company also sells efficient, portable wood- and charcoal-burning cookstoves.
One of GCS’ suppliers is Greenlight Planet, a provider of solar lights to off-grid rural consumers. Greenlight Planet CTO Patrick Walsh says he values feedback from Wu, who directly interacts with Greenlight Planet’s end users. Greenlight was founded by Walsh when he was an undergraduate student at the University of Illinois at Urbana-Champaign. While working in rural India during the summer of 2005 with the group Engineers Without Borders, Walsh came to understand the challenges facing billions of people who lack access to electric power. In response, he designed a solar-powered replacement for the kerosene lamp that was inexpensive enough that people could buy it on their own, without subsidies.
While solar lights are GCS’ biggest seller at present, Walsh says that cell phone charging solar lights are his top product. Those devices present a practical alternative to traveling to a village with electricity and paying money to charge the phone.
GCS’ solar products are imported from China (via a stop in Greenlight Planet’s U.S. warehouse) and end up Nairobi, Kenya. From Nairobi the products are shipped via truck to GCS, where they are loaded onto lorries and shipped to branch offices. The goods then are loaded onto a Volkswagen bus-like vehicle and driven to the villages.
The products then are sold door-to-door, at village markets, via village credit cooperatives and through schools, where GCS sells the lights to teachers so they can teach students about solar power. Most products are sold via mobile payment systems, Wu says.
Walsh and Wu are encouraged by a recent innovation involving technology-enabled, pay-as-you-go purchasing systems. Walsh says that it’s difficult for customers to pay $40 in cash for a solar light and that installment payment plans are tough to enforce.
Greenlight Planet’s pilot program allows customers to pay on an installment basis and enforces prompt payments by shutting off the light if a payment isn’t made. The customer visits an agent, makes a payment and the agent connects the customer’s mobile phone to the product and updates the payment.
“It’s a way of basically allowing consumer finance for these very low-cost products,” Walsh says. “It’s been pretty successful so far.”